Altria Group Surpasses Earnings Expectations Amid Industry Challenges
Altria (MO) reported quarterly earnings of $1.38 per share, surpassing the Zacks Consensus Estimate of $1.36 per share. This marks an increase from earnings of $1.28 per share a year earlier. The figures provided have been adjusted for non-recurring items.
The earnings surprise of 1.47% indicates a strong performance. In the previous quarter, Altria, the parent company of Philip Morris USA, anticipated earnings of $1.35 per share but instead posted $1.31, falling short by -2.96%.
In the past year, Altria has outperformed consensus EPS estimates in two of the four quarters. For the quarter ending September 2024, the company generated revenues of $5.34 billion, exceeding the Zacks Consensus Estimate by 1.05%. This also reflects an increase from revenues of $5.28 billion reported a year ago. However, Altria has beaten consensus revenue projections only once in the last four quarters.
The immediate future of Altria’s stock price will rely heavily on management’s insights in the upcoming earnings call. Since the start of the year, Altria shares have risen approximately 25.2%, outpacing the S&P 500’s growth of 21.9%.
Future Outlook for Altria
Investors are left wondering what lies ahead for Altria after its strong performance this year. Accurately predicting the stock’s trajectory is complex, but one effective way is to assess the company’s earnings outlook, which includes current consensus expectations for upcoming quarters and recent trends in those estimates.
Research shows a significant link between stock movements and earnings estimate revisions. Investors can monitor these revisions independently or utilize tools like the Zacks Rank, which has a successful history of leveraging revisions for investment strategies.
Currently, the trend for Altria’s estimate revisions appears unfavorable. Although the situation may change following the latest earnings report, the existing status results in a Zacks Rank of #4 (Sell) for the stock, indicating a potential underperformance in the near term. Observing how future estimates manifest in the upcoming days will be critical.
For context, the current consensus EPS estimate for the next quarter stands at $1.29 on projected revenues of $5.04 billion. For the ongoing fiscal year, the estimate is $5.11 per share on $20.32 billion in revenues.
The performance of Altria’s stock will also be influenced by the overall industry outlook. The Tobacco industry currently ranks in the top 39% among over 250 Zacks-rated industries. Historical data shows that industries in the top half of this ranking outperform those in the bottom half by a factor of more than two to one.
Additionally, Turning Point Brands (TPB), a fellow member of the Tobacco industry, is set to release its quarterly results on November 7. It is anticipated that Turning Point will report earnings of $0.67 per share, reflecting a year-over-year decrease of -11.8%. The anticipated revenue for the quarter is $102 million, which represents a modest increase of 0.3% from the previous year.
Is Altria Group, Inc. (MO) a Smart Investment?
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The views expressed in this article are solely those of the author and do not necessarily represent those of Nasdaq, Inc.
